Premiumization Strategies in Food and Drinks: Fighting product commoditization through added value product positioning

Premiumization Strategies in Food and Drinks: Fighting product commoditization through added value product positioning published by Business Insights in August, 2010. This report consists of Pages: 126 and the price starts from US $ 2875.

Introduction

Abstract

Whilst the premiumization trend may be identified as starting in the 1970s, the term is only considered to have entered common parlance in the early 2000s. Although it is widely used, premiumization is a term rarely defined, particularly in applying the trend outside of the alcoholic drinks market. This report will identify recent and current successful premiumization strategies and consider the impact that the economic downturn has had on the premium sectors of the food and drinks industry. It will consider how premiumization can be achieved and defended. The report will also provide an outlook for the future of premiumization, as well as identify opportunities for future strategies.

Table of Contents

About the author

• Disclaimer

Executive summary

• Introduction
• Major trends in premiumization
• Defining premiumization
• Premiumization and consumer needs
• Emerging consumer trends and their application in premiumization
• Building a successful premiumization strategy

Chapter 1 - Introduction

• Summary
• Introduction
• Defining premiumization
• What constitutes premium?
• Tiered premiumization

• Scope and structure of this report
• Definition of ‘premium'

• Report overview

Chapter 2 - Major trends in premiumization

• Summary
• Introduction
• A brief history
• Drivers behind the development of premiumization

• Economic and social factors
• Rise in disposable income
• Development of the middle class
• Increase in smaller households
• Later marriage and later, or smaller, families
• The increasing proportion of women in the labor force

• Drivers by stage of premiumization
• Early stage

• Expansion
• The role of manufacturers and retailers
• Consumer drivers in the expansion of premiumization

• Maturation
• The development of masstige

• Case Study of a Mature market: The UK crisps category
• What distinguishes tiers in the current crisp market?
• Masstige or premium?
• Implications for premiumization in a mature market

• The impact of recession
• Consumers have sought to save money in their shopping basket
• Non grocery purchasing has been affected more than grocery
• Sales of premium products have been under pressure

• Many premium products have benefited from the economic downturn
• The shift to eating in
• The shift to cooking and home baking
• A retained ‘small luxury'
• Concerns about food and ethical standards remain
• Wider consumer values have been affected

• Post recession implications for premiumization
• Economic recovery
• Sales of premium products will remain subdued
• Premiumization will recover to its pre-recession days
• A change in the nature of ‘premium' :

Chapter 3 - Defining premiumization

• Summary
• Introduction
• Product specification
• Product ‘quality'
• ‘More of' or ‘a better quality of'
• Increasingly complex product specification
• Health related ingredients
• ‘High in...' claims as a premium health positioning
• ‘Added...' claims as a premium health positioning
• ‘Low in...' claims as a premium health positioning
• ‘No...' claims as a premium health positioning
• High end and natural ingredients
• Limited and exclusive ingredients
• Production and manufacturing
• High-end production techniques that retain or add to the high quality ingredients

• Minimal production techniques
• Scale of production

• Ethical production techniques or approaches
• Premiumization through provenance
• Distribution strategies
• Packaging strategies
• Packaging material
• Pack design
• Pack description
• Luxury
• Connoisseur
• Exclusive
• Premium
• Super-premium
• Other terms
• Premiumization via packaging
• Brand positioning

Chapter 4 - Premiumization and consumer needs

• Summary
• Introduction
• A model of consumer motivations
• Motivation relating to the intrinsic product
• Status acquired from product (brand) consumption
• By tier of premiumization
• The evolution of consumer motivations
• Status motivations
• Intrinsic product motivations

Chapter 5 - Emerging consumer trends and their application in premiumization

• Summary
• Introduction
• Consumers are seeking reassurance and trustworthiness
• The continued importance of local
• The opportunity of handmade and customized
• Concerned consumerism
• Environmental, the premium way

• Case Study: ILOHAS water
• Generosity
• A different relationship with the brand
• Members' clubs

• Part ownership of production - a honey case study

Chapter 6 - Building a successful premiumization strategy

• Summary
• Introduction
• Sphere of operation
• Tier of premiumization

• Markets of operation

• The threats to a premium product
• Maximizing the chances of success
• Provide a clear reason for purchase
• Offer clear product and status benefits
• Create a new category or consumer motivation
• Case Study: Red Bull

• Be obviously premium
• A premium brand positioning
• Be packaged premium
• Be small or offer small company values
• Be premium in the use of media

• Build the premiumization strategy on relevant and emerging consumer trends
• Added or super ingredients
• Local, simple, just high quality
• Relational and experiential
• Knowledge
• Exclusivity and scarcity
• Superior quality
• Concerned consumerism

Table of figures

• Figure 1: Quality segments of the global wine market
• Figure 2: Tiers of premiumization in food and drinks
• Figure 3: Development of premiumization
• Figure 4: GDP at purchasing power parity (PPP) in $ per capita, selected major economies, 2004-2014 27
• Figure 5: Trends in global middle class growth
• Figure 6: Heinz Farmers' Market
• Figure 7: Development of premiumization in the UK crisps market
• Figure 8: Walkers Sensations and Tyrrells Potato Chips
• Figure 9: Hairy Biker Potato Crisps range (also available in lemon and olive tagine)
• Figure 10: Areas of expenditure most affected by the recession (ranked 1 to 10 by consumers in each of 8 countries)
• Figure 11: Consumers ‘ladder up' through technical and functional to emotional benefits
• Figure 12: Evolution of the meaning of ‘quality' in relation to premium food and drink products
• Figure 13: Guggisberg - Grass-Fed Premium Swiss Cheese
• Figure 14: Choclatique - Q-91 Chocolate Wafers - Bali-Hi; Bora Bora; Forbidden City; Original; Saigon Cinnamon flavors
• Figure 15: Anti Ageing Water Range - Nutra Resvetarol
• Figure 16: Japanese Delight - Premium Kombu Seaweed
• Figure 17: SoZo CoffeeBerry - ) - Exclusive Dietary Supplement Functional Beverage
• Figure 18: Noni Zoda - Fortified Noni Super Premium Beverage with DMG - Organic Sweetened; Sugar Free
• Figure 19: Kona Premium Estate Coffee
• Figure 20: Redleaf - Canada' s Ultra Premium Bottled Water
• Figure 21: Heartland Creamery - French Style Fresh Chevre Cheese with Lavender
• Figure 22: Ethical food and drink sales in the UK (£m), 1999- 2008
• Figure 23: Hotel Chocolat - Chocolate Collection - The Undiscovered Cocoa of St Lucia
• Figure 24: Freshly Wholesome Gourmet - Complete Meal - Indian Tandoori Wild Alaskan Salmon variant
• Figure 25: Essential Trading Co-op Ltd: Organic, Luxury Mueslis, Granolas and Cereals
• Figure 26: Hwa Tai Luxury - Cracker - Original; Vegetable
• Figure 27: Soprole Activ - Yogurt Bebible con Micro Cal - Sabor Frambuesa; Sabor Multifruta
• Figure 28: Forte Healthy Energy Shot
• Figure 29: Fillico Beverly Hills Luxury Spring Water
• Figure 30: A generalized model of the major metrics defining market tier
• Figure 31: Consumer motivations in buying a premium product
• Figure 32: Relative importance of product and status as purchase motivations, by tier of premiumization
• Figure 33: Evolution of status related motivations
• Figure 34: Evolution of intrinsic product related motivations
• Figure 35: Tesco' s ‘Enjoy the Taste Of....' campaign reflects the increase in importance of ‘local’
• Figure 36: Mymuesli.com - customized, delivered, organic muesli
• Figure 37: ILOHAS mineral water from Coca Cola Japan in ‘eco' PET bottle
• Figure 38: Your Pure Honey Manuka honey certificate of ownership, hives and jars
• Figure 39: Innocent guest smoothie Lemon, Honey and Ginger, helping to support bee populations
• Figure 40: Nestle Waters Brand Portfolio
• Figure 41: A generalized model of the main threats to the maintenance or growth of a premium product
• Figure 42: Red Bull Energy Drink
• Figure 43: Red Bull Website Home Page

Table of tables

• Table 1: Middle class population size (m) & share of global total (%), 2009-2030
• Table 2: Average household size 1990 - 2015
• Table 3: Proportion of labor force which is female (%), 1990-2015
• Table 4: GDP growth for Major Economies (% change), 2008, 2009 and 2011
• Table 5: GDP growth for Major Economies (% change), 2008, 2009 and 2011
• Table 6: Premium product launches in categories of interest and product claims May 2006 May 2010
• Table 7: Percentage of new product launches with high / low /no ingredient health claims
• Table 8: Proportion of premium new product launches with various ‘clean' claims (%), 2007-2010
• Table 9: Consumer priorities and motivations

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